The Abacus CDOs' performance, "while undoubtedly bad, was actually better than average among all bonds that had been similarly packaged."

Beyond this interesting insight, the the study nonetheless supports the assertion that collateralized debt obligations (CDOs) created from asset backed securities (ABS) were designed to decline in value:

Using a unique database published by the investment firm Pershing Square Capital Management, Faltin-Traeger and Mayer identified the underlying bonds in some 528 ABS CDOs issued between 2005 and 2007, and compared their performance to similar bonds that weren't included in CDOs.

They found that the bonds in the CDOs performed a lot worse. Even if one holds observable characteristics such as initial ratings and yields constant, the bonds in the CDOs suffered ratings downgrades that were 50 percent to 90 percent more severe. As of June 2010, for example, bonds with initial triple-A ratings had been downgraded by an average 11.84 notches, compared to 5.99 for those not in CDOs. The bonds in the CDOs were also more likely to have been rated by all three major credit-rating firms.

Was the poor performance the result of intent on the part of the issuing banks? On this point, the authors note, "It would have been very hard to randomly choose securities with such poor ex-post performance."

This is, on its face, damning.

But is also points to the fact that the broader assumption behind the creation of ABS CDOs was deeply flawed: namely, that you could take marginally credit worthy assets and structure them in such a way that risk would be more effectively distributed.

Instead, this study shows CDOs did little to smooth risk and may have, in fact, been a dumping ground for assets the banks preferred not to hold onto.

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The Bleachers

Well as it turns out CARL LEVIN is not above doing SHITTY deals him self, as he under the orders of AIPAC and with the help of traitor song bird of the hanoi hilton john mccain and fellow chicken hawks joe liberman and lindsey graham , etc, LEVIN pushed the NATIONAL SECURITY AUTHORIZATION ACT through the senate and added provisions that gave the government the power to arrest citizens without warrant , and to imprison and even KILL american citizens without a trial.
In addition the passage of the NDAA put america under martial law in total violation of the constitution and in fact every member of congress and the manchurian potus violated their oath of office to PROTECT AND DEFEND THE CONSTITUTION OF THE UNITED STATES OF AMERICA. Now how is that for a SHITTY DEAL.

In addition at a time when americans are living in cars, and tents and homeless shelters across america , the NDAA costs 662 BILLION out of a budget of 1 TRILLION, which means 66.2 % of the budget is going to feed the PENTAGRAMS war machine, while homeless people live in cars, tents and shelters, how is that for a SHITTY DEAL..

The NDAA spending works out to 55 BILLION A MONTH and 1.8 BILLION a day for death and destruction while americans are living in the street ,, hows that for a SHITTY DEAL. Congress is totally under the control of AIPAC and other neocon chicken hawk gangs like the RAND CORP, the BROOKINGS INSTITUTE etc.,, congress and the potus and the neocon war mongers are totally immoral clones of the gods of war in the government of israel, end the control of israel and the wars will end.

THANKS CARL LEVIN FOR THE SHITTY DEAL.

Goldman's Infamous 'Sh*tty Deal' Turns Out Not To Have Been As Sh*tty As Others